The Federal Communications Commission (FCC) plans to exercise more regulatory oversight over entities that have the authority to provide communications between the United States and foreign countries. These "International 214" authorization holders traditionally have not been subject to aggressive agency oversight, but the agency appears to be changing course as part of a broader U.S. government policy of tightening oversight over the actions of foreign governments and actors who may pose a national security threat.
The FCC has released an Order and Notice of Proposed Rulemaking seeking comment on proposed additional requirements for international Section 214 authorization holders. Most significantly, the proposed rules would require international Section 214 holders to renew their authorizations every 10 years or, in the alternative, submit to a periodic review process. The Notice also includes proposals to increase review of all international Section 214 authorizations and applications.
The Order subjects all international Section 214 holders to a one-time information collection, part of the FCC's effort to gain an accurate assessment of how many authorization holders are actively operating under their Section 214 authority. As part of this information collection, the FCC solicits differing information, depending on whether there is reportable foreign ownership and whether that ownership is by a designated "foreign adversary" country. In the Notice, the FCC proposes canceling the authorizations of carriers that do not respond to the Order and imposing forfeitures and other necessary measures for carriers that fail to respond in a timely or complete manner.
Currently, once international Section 214 authority has been granted, there is no formal process for FCC review of authorizations or for the FCC to receive updated information regarding those authorizations. The proposed rules seek to modify the existing regulatory framework to ensure ongoing oversight over an authorization once it has been granted.
The FCC proposes and seeks comments regarding the following:
- Renewal Requirement for International Section 214 Authorization:
- A 10-year renewal requirement for all international Section 214 holders, regardless of foreign ownership, or an alternative three-year periodic review process
- The specific requirements of the renewal application that mirror the initial application
- The applicability of the new rules to authorizations granted prior to the effective date of the rules
- The appropriate standard of review to assess renewals (or to be used in the periodic review process)
- New Application Requirements for All International Section 214 Applicants and Authorization Holders:
- Requiring disclosure of reportable foreign ownership threshold to 5% in initial applications and on a periodic basis once authorization has been granted
- Requiring disclosure of information regarding current and/or expected future services provided and geographic markets covered in the U.S. under a carrier's international Section 214 authority
- Requiring disclosure of use of or intent to use foreign-owned Managed Network Service Providers
- Requiring disclosure of cross-border facilities used by carriers to provide services across the U.S.-Mexico and U.S.-Canada borders
- Requiring certification as to compliance with baseline cybersecurity standards and use of services or equipment on the "Covered List"
- Requiring certification as to general compliance with FCC rules
- Miscellaneous Changes to Part 63 of the FCC Rules:
- Limiting authorization holders to only one international Section 214 authorization and proposing and requiring surrender of excess authorizations
- Requiring authorization holders to commence service under its international Section 214 authority within one year or face cancellation of the authorization
- Requiring authorization holders to provide notice to the FCC of permanent discontinuance and surrender of their authorization
- Requiring authorization holders to provide updated information to the FCC every three years after the grant of a renewal
- Requiring authorization holders seeking to assign or transfer control of their authorization to identify any International Signaling Point Codes held
The FCC's stated motivation for the proposed rules is to update the international Section 214 authorization framework to account for national security, law enforcement, foreign policy, and trade policy concerns that may arise following grant of an authorization. In particular, the FCC relies on a report of the U.S. Senate Committee on Homeland Security and Government Affairs, Permanent Subcommittee on Investigations, that recommended a periodic review and renewal system in light of national security concerns regarding Chinese state-owned carriers operating in the United States.
Comment and reply comments will be due 30 and 60 days after publication of the item in the Federal Register, likely by midsummer.
The authors would like to thank Maxine Morgan, summer associate, for her assistance in preparing this alert.